Comcast merger under fire

Snow piled up in Washington on Thursday — and so did quick opposition to Comcast’s play to buy Time Warner Cable.

Reports of the $45.2 billion deal, in fact, were barely 2 hours old when statements against the blockbuster merger first landed from public interest groups Free Press and Public Knowledge. If completed, the deal will have a major impact on the pay-TV and broadband Internet markets.

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“By raising the costs of its rivals and business partners, an enlarged Comcast would raise costs for consumers, who ultimately pay the bills,” Public Knowledge Senior Staff Attorney John Bergmayer said in a statement. “It would be able to keep others from innovating, while facing little pressure to improve its own service. New equipment, new services and new content would have to meet with its approval to stand any chance of succeeding.”

Washington sees a healthy debate about the competitiveness of the cable and broadband markets even on a normal day. But Comcast’s planned acquisition — which has implications for heated issues like net neutrality, retransmission consent and data caps — has further stirred the pot.

“Where we’re really concerned is in the ability for a much bigger Comcast to give even more preferential treatment to the content and networks it owns through its purchase of NBC Universal,” said Stephanie Chen, telecommunications policy director at The Greenlining Institute. “This merger would make a tough situation even tougher for smaller content providers, especially minority-owned and -produced content.”

Comcast and Time Warner Cable executives, aware of the regulatory questions facing the proposal, were quick to pitch the public interest upside of the proposed deal during a conference call with reporters Thursday.

“On a regulatory front, we believe this transaction is approvable,” Comcast CEO Brian L. Roberts said. “It will not reduce competition in any relevant market as our companies do not overlap or compete with each other; in fact, we do not operate in any of the same zip codes.”

The American Cable Association, a trade group that represents small and medium-sized cable operators, said it would be considering whether the deal would hurt consumers.

“ACA has long acknowledged many problems in the pay-TV market, including the soaring cost of retransmission consent and sports networks and the record-setting number of broadcaster-imposed TV signal blackouts,” CEO Matthew Polka said in a statement. “ACA will be looking closely to see whether this transaction makes matters worse for small and medium-sized cable operators and their customers.”

With most of Washington ground to a halt Thursday and lawmakers skipping town or busy at political retreats, the cable firms largely escaped early concerns from Capitol Hill. Senate antitrust subcommittee chairwoman Amy Klobuchar (D-Minn.), for her part, did commit to holding a hearing that would “carefully scrutinize” the deal.

The blogosphere, however, had early detractors.

Salon’s Andrew Leonard penned a post titled “Comcast must be stopped.” New York Magazine’s Kevin Roose said the deal would create a “mega-empire in an industry that is already dominated by a few huge companies.”

“For this reason alone — to say nothing of how long you’d have to stay on hold on a combined Comcast-TWC customer service line — the deal must be stopped,” he wrote.

Several observers were cautioning that regulators shouldn’t toss the deal simply because it would generate one gigantic entity. But cable companies are a favorite punching bag of distressed consumers, and that’s likely to color perception in the deal’s early stages.

Perhaps the icing on the cake: A White House petition, which has become a popular method of opposition in the past few years, is already collecting signatures.